In conventional hot water heaters, combustion gases from burning gas or other fuel pass through heat exchanging tubes immersed in a tank containing the water being heated or over serpentine tubes containing the water being heated. The hot combustion gases are then vented to the atmosphere. Such hot water heaters are relatively inefficient because only a small percentage of the heat from the hot gases is given up to the water before the gases are vented. The hot vented gases are a potential fire hazard and, when certain types of fuels are burned, are a source of pollution.